John Schnatter apologised after admitting that reports attributing use of ‘inappropriate and hurtful’ language to him were true.
Photograph: Danny Moloshok/Reuters

The founder and chairman of pizza chain Papa John’s has resigned, hours after being forced to apologise for using a racial slur on a conference call in May.

Forbes reported that John Schnatter used the N-word during a media training exercise. On the May call, when asked how he would distance himself from racist groups, Schnatter reportedly complained that KFC founder “Colonel Sanders called blacks niggers” and never faced any public backlash.

In a statement released by Kentucky-based Papa John’s on Wednesday, Schnatter said the reports of “inappropriate and hurtful” language made by him were true. “Regardless of the context, I apologise,” the statement said.

Schnatter, 56, made the comments during an exercise that was organized after Schnatter set off a firestorm in November when he blamed poor sales on the furore surrounding NFL players’ protests against racial inequality.

Papa John’s is a major sponsor of the NFL. Schnatter attributed sluggish sales to the decision by some NFL players to kneel during the pre-game national anthem.

“NFL leadership has hurt Papa John’s shareholders,” said Schnatter at the time. He said “the NFL has hurt us by not resolving the current debacle” and said the protests “should have been nipped in the bud a year and a half ago”.

The company said Olivia Kirtley would act as lead independent director. It added it would appoint a new chairman in the coming week.

“Papa John’s condemns racism and any insensitive language, no matter the situation or setting ... We take great pride in the diversity of the Papa John’s family, though diversity and inclusion is an area we will continue to strive to do better,” the company said in a separate statement.

Schnatter, who founded the company in 1984, resigned as chief executive in December last year, after the outcry over his NFL comments. He remained chairman of the board.